New non-displayed US alternative trading system (ATS) IEX, whose ownership consortium includes several buy-side firms, successfully launched Friday with one participant confirming successful test trades and no reported system errors.
The sell-side-oriented platform, which offers no direct buy-side connectivity and aims to reduce the negative impact of predatory high-frequency activity, did not release Friday volumes, but said it was content with the opening day.
“The trading system – both router and matching engine – performed very well and we exceeded my expectations on all other metrics,” said Matt Trudeau, head of product for IEX, told theTRADEnews.com. Despite the positive opening day, he said the platform's success would be measured in the long-, not short-term.
The platform’s matching logic will prioritise agency and riskless principal orders ahead of principal orders when a broker is trading with itself, while also providing free internalisation for brokers that match both sides of a trade. IEX is owned by a group of investors including buy-side participants representing mutual and hedge funds.
Trudeau said the venue would not share trade volumes for the initial days of trading, but said the system itself did not display any flaws in the opening day of activity.
“I have been a part of eight ATS launches, including IEX, around the globe and this was the strongest I’ve witnessed in terms of the breadth of participation, order and trade activity, and diversity of symbols matched and routed,” he said.
Speaking anonymously to theTRADEnews.com, a broker-dealer connected to IEX said buy-side clients had registered interest in the new platform, but had not yet executed trades.
The executive confirmed test trades had been conducted on the venue with success but agreed it was too early to predict what kind of liquidity the venue would attract.